Who was the wise statesman who made the following comment?
“The miner, the industrialist, the trader, the financier and the banker, if they play their role correctly, will do more to achieve world understanding and peace in a generation than the politicians and diplomats could do in a hundred years. Why? Because they are closer to reality, closer to their opposite numbers, closer to the community in the countries where they operate. In other words, they have more to do with real people than with institutions.”
It was Sir Charles Court, back in 1971, as Minister for Industrial Development, before becoming Premier of Western Australia. His words are a precise and humble comment that recognizes that as much as politicians may think they make the running, it is real people like you, representing your country that have the really deep and lasting effects on relations between countries.
Each time I travel I remember these wise words.
It’s been my honour to be almost the lone Australian at recent economic conferences in Turkey, Israel, Shanghai and shortly in Prague, followed by New York. On each occasion, the languages and accents are vastly different, the problems, whilst superficially different, have one thing largely in common and it is that government spending, on average has grown from about 12.7 per cent in 1914 to 47.7 per cent in 2009.
Governments say they spend because the economy is weak and the economy continues to be weak because government spending is crowding out productive private investment. It is a vicious cycle that needs to be broken by re-evaluating the role and scope of government in societies of free and responsible individuals.
Professor Peter Boettke, of George Mason University in the USA, puts it this way:
“The important political/intellectual activity of our age is not to starve the state of resources but to build the intellectual case that we can starve the state of responsibility. Also, society can in fact provide the necessary framework and acts of compassion to render state actions needless. But before that, it is necessary to demonstrate that the justificatory arguments for the state are not as airtight as imagined…”
However, it takes courage for business and community leaders to stand up against all-consuming, heavy handed governments. In Turkey I marvelled at the courage displayed by the various youth leaders from the Arab Spring group of besieged countries. I couldn’t help wishing that Australia’s crop of non-courageous business leaders could have witnessed these speeches. You can watch them below:
Australia’s current economic debate is more of a light-hearted spectator sport between the Keynesians (those who advise governments that they will retain their popularity by promoting the myth that debt-fuelled consumption is the pathway to a growing economy) and the Hayekians (free-marketeers who feel that debt can destroy, and are uncomfortable about bequeathing this debt to the next generation). The most entertaining version of this debate, is the Keynes vs Hayek rap.
Yes, it would be encouraging if we could see big business get up off their knees and defend the country against big government, rather than them seeing government as simply a dispenser of permits and privileges.
Back on the Keynes vs Hayek economic debate, I was reminded last week in Shanghai (at the Austrian Economics Summit) that the Chinese have a much longer view of history and have been debating this big government vs small government question over a longer time frame. They had a similar rap re-enactment where Confucius was the equivalent of Keynes and Lao Tsu the equivalent of Hayek. Both these Chinese scholars (Confucius and Lao Tsu) were from the sixth century BC and now over 2500 years later the debate between big and small government continues.
Here is a sample from Lao Tsu (6C BC):
“Why are the people starving? Because the rulers eat up the money in taxes. Therefore, the people are starving. Why are the people rebellious? Because the rulers interfere too much. Therefore, they are rebellious.”
Perhaps this explains why he has been my favourite philosopher for so many years.